Kerry Khan & Lee Khan plead guilty in USACE bribery scandal
“Today the ringleader of the largest bribery and bid-steering scheme in the history of federal contracting accepted responsibility for his crimes,” said U.S. Attorney Machen. “For his shocking abuse of his position of power, Kerry Khan faces more than two decades in prison. The homes, cars, and jewelry he financed with bribes and kickbacks have now been returned to their rightful owner – the American taxpayer.
~ U.S. Attorney Ronald C. Machen
Second Former U.S. Army Corps of Engineers Manager Pleads Guilty in Alleged $30 Million Bribery and Kickback Scheme
Scam Involved Steering of Government Contracts; Official’s Son Also Pleads Guilty to Charges Today
(DoJ) – WASHINGTON – Kerry F. Khan, 54, a former program manager for the U.S. Army Corps of Engineers, pled guilty today to federal charges of bribery and conspiracy to commit money laundering in a scheme that allegedly involved more than $30 million in bribes and kickback payments and the planned steering of a government contract potentially worth $1 billion.
The plea was announced by U.S. Attorney Ronald C. Machen Jr.; Ronald T. Hosko, Special Agent in Charge of the FBI Washington Field Office’s Criminal Division; Eric Hylton, Acting Special Agent in Charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); Peggy E. Gustafson, Inspector General for the Small Business Administration (SBA); Robert E. Craig, Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU).
Khan’s son, Lee A. Khan, 31, formerly of Fairfax, Va., also pled guilty today to charges in the case.
Khan and his son were among four men arrested on Oct. 4, 2011, following an investigation into one of the most brazen corruption schemes in the history of federal contracting. The others arrested that day – Michael A. Alexander, a former program manager for the U.S. Army Corps of Engineers, and businessman Harold F. Babb – earlier pled guilty to charges in the case. Khan, Lee Khan, Babb, and Alexander have been in custody since their arrests in October. All told, eight defendants have now pled guilty in the ongoing investigation.
Kerry Khan, formerly of Alexandria, Va., pled guilty before the Honorable Emmet G. Sullivan in the U.S. District Court for the District of Columbia. A sentencing date has not been set. The bribery charge carries a statutory maximum of 15 years in prison and the conspiracy charge carries up to 20 years of incarceration.
The charges also carry potential fines, an order of restitution, and forfeiture of a money judgment for $11,082,687, and specific property, including more than $1.4 million in bank account funds, 13 properties in Virginia, Florida, and West Virginia, and a 2011 GMC Yukon Denali truck. Kerry Khan has previously forfeited about $600,000 in bank account funds and four luxury automobiles.
Also before Judge Sullivan today, Lee Khan pled guilty to a charge of conspiracy to commit money laundering. No sentencing date was set. As part of his plea agreement, Lee Khan agreed to forfeit his interest in more than $1 million in bank account funds, 13 properties in Virginia, Florida, and West Virginia, and a Rolex watch.
In the overall investigation, to date, the United States has seized for forfeiture or recovered approximately $7.5 million in bank account funds, cash, and repayments, 19 real properties, six luxury cars, and multiple pieces of fine jewelry.